Media Advisory 05-03-21

FASB Issues Standard Clarifying the Issuer’s Accounting for Certain Modifications of Freestanding Equity-Classified Written Call Options

Norwalk, CT, May 3, 2021—The Financial Accounting Standards Board (FASB) today issued an Accounting Standards Update (ASU) that clarifies an issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange.

The ASU is based on a consensus of the FASB’s Emerging Issues Task Force (EITF). The ASU provides guidance on how an issuer would measure and recognize the effect of these transactions. Specifically, it provides a principles-based framework to determine whether an issuer should recognize the modification or exchange as an adjustment to equity or an expense.

The ASU is available at